The shares dropped as much as 13 percent on Thursday in Zurich after the bank posted a fourth-quarter loss of 5.8 billion Swiss francs ($5.8 billion), worse than analysts’ estimates. Global markets, which houses most of the Zurich-based firm’s trading business, had the biggest quarterly loss among the company’s divisions as Thiam cited “legacy positions” hurt by jittery markets.

Thiam signaled confidence in his target of more than doubling pretax profit by 2018, which he wants to achieve by shrinking the volatile trading business and building up wealth management in Asia. Citing the “particularly challenging environment” since he announced a strategic overhaul in October after his appointment as CEO, Thiam said he would accelerate staff reductions, with 4,000 jobs cut by the end of this year.

“The problem is that he set some really demanding targets, and he’s now having to adapt to perhaps a new paradigm,” Christopher Wheeler, an analyst at Atlantic Equities, said on Bloomberg Television. “That means he has to make deeper cuts at the investment bank to really see the wealth-management performance shine through.”

1991 Low
The company reported a goodwill impairment of 3.8 billion francs. Thiam, 53, who warned in October that 2016 would be a tough year, said the environment had deteriorated in the fourth quarter and he expects markets to remain volatile in the first part of this year.

The shares tumbled to the lowest since 1991 and were down 11 percent at 14.68 francs at 4:40 p.m. in Zurich. They have dropped about 32 percent this year, outpacing the 22 percent slide at larger rival UBS Group AG, which missed earnings estimates two days ago.

“The numbers are terrible,” said Dieter Hein, an analyst at AlphaValue in Kronberg, Germany, who is reviewing his recommendation on the shares. “In the mid-to-long term, it’s right to focus on growth in Asia, but what bad timing given the current environment.”

Thiam has pledged to focus the second-largest Swiss bank on wealth management to tap growth across Asia as tougher capital rules and lower revenue weigh on the securities divisions.

“We view these as very poor results,” Citigroup Inc. analysts including Andrew Coombs wrote in a note to clients. “We do not believe the 2018 targets are achievable. We expect near- term profits will continue to suffer as the bank restructures.” Citigroup has a buy rating on the shares.

In the fourth quarter, Credit Suisse took restructuring costs of 355 million francs and litigation charges of 564 million francs. The goodwill impairment was mainly related to the acquisition of Donaldson, Lufkin & Jenrette in 2000.

The bank’s common equity Tier 1 ratio, a measure of financial strength, was at 11.4 percent, up from 10.1 percent a year earlier after the bank tapped investors for about 6 billion francs last year.

Banks around the globe are shrinking their investment- banking divisions as capital requirements stiffen. Last week, Deutsche Bank AGsaid its securities unit slipped into a loss in the fourth quarter. UBS, on Tuesday, reported a drop in profit at both its wealth-management division and investment bank.

Asset Outflows
At Credit Suisse, revenue at the units that house trading, advisory and underwriting businesses outside of Switzerland and Asia slumped 35 percent to a combined $1.5 billion. Excluding goodwill impairments and restructuring costs, the units posted a pretax loss of $761 million combined for the period, compared with a profit of $516 million a year earlier.

“What we’re doing is really de-risking -- getting out of relatively illiquid, long-dated activities,” Thiam said in an interview with Francine Lacqua on Bloomberg TV. The global markets and investment banking divisions will probably struggle the most this year, because “they’re the ones we control the least,” he said.

The Swiss universal bank, the division earmarked for an initial public offering by the end of 2017, reported a 48 percent drop in pretax profit to 367 million francs in the fourth quarter, with net asset outflows of 2.9 billion. The international wealth management unit had a loss of 20 million francs in the period, with private banking hurt by net asset outflows of 4.2 billion francs. The Asia-Pacific region reported a loss of 617 million francs.

Thiam said the bank is “very confident” about reaching its target of cutting costs by 3.5 billion francs by 2018. The lender’s cost-to-income ratio, a measure of efficiency, almost tripled to 250 percent in the fourth quarter, as it incurred total operating expenses of 10.5 billion francs.

Credit Suisse’s costs were higher than anticipated even after stripping out charges for litigation and restructuring, according to Shailesh Raikundlia, an analyst at Haitong Securities in London who has a neutral recommendation on the shares.

The bank cut variable pay by 11 percent, with bonus reductions of more than 30 percent at divisions such as global markets “that have underperformed,” Thiam said.

‘Rough Winds’
“We want to have an investment bank with stable earnings,” the CEO said in the interview. “It will be smaller, consume less capital and be more profitable, which are three good things to do at the same time.”

Asked whether Credit Suisse has considered selling a significant part of its investment bank, Thiam said “no, absolutely not,” adding that the unit is “core to our strategy.” Wells Fargo & Co. denied a report Wednesday that said it had discussed buying a major part of the Swiss company’s investment bank.

“Credit Suisse’s investment case is especially dependent on future earnings growth,” said Andreas Brun, an analyst at Zuercher Kantonalbank who rates the shares market weight. “Even to just get in the direction of their goals, they need the market as a tailwind. But at the moment, they have rough winds blowing at them from all directions.”